Research note: the effect of different indexation scenarios on child poverty in the UK
Paola De Agostini () and
No EM8/15, EUROMOD Working Papers from EUROMOD at the Institute for Social and Economic Research
Using the tax-benefit microsimulation model EUROMOD and Family Resources Survey, we investigate what would have happened to child poverty in the UK in the periods 2010/11â€“2015/16 and 2015/16â€“2020/21 under a range of different indexation scenarios of childrenâ€™s benefits. We find that between 2010/11 and 2015/16 both the relative and absolute child poverty rates would have been lower if childrenâ€™s benefits were uprated by RPI or if the government had introduced the Child Tax Credit uprating package it promised in 2010. Uprating childrenâ€™s benefits up to 2020/21 as announced by the government in the Autumn Financial Statement in 2014 would result in real benefit cuts and increase in child poverty. However, triple lock indexation of childrenâ€™s benefits would sustain their real value and would reduce child poverty rates substantially.
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